Coming to NCGA: Bill to trade tax credits for private school scholarships

N.C Rep. Majority Leader Paul “Skip” Stam plans on introducing a bill this week that would establish a tax credit scholarship program in North Carolina.

Stam, one of the legislature’s most vocal critics of the state’s public education system, spoke about the proposed bill this afternoon in front an estimated crowd of an estimated 1,000 parents, students, and private school educators in Raleigh for Parents for Educational Freedom in North Carolina[1]’s lobbying day.

Tuesday’s rally and legislative day was a little more than two months after Parents for Educational Freedom flew 11 lawmakers down to Miami to hear about Florida’s version of the tax credit program.

Supporters of the program there say it allows poor children to escape failing public schools and attend private schools. But critics in Florida, and the seven other states that have similar program, say it strips the state of needed tax revenue while sending children to private, often religious schools, that don’t have to meet the same standards as public schools.

An extensive New York Times article[2] published today on its front page found that private schools, and the scholarship foundations that handle the donations, have benefited enormously from the state-sanctioned trade-off of tax credits for scholarships. Nationally, an estimated $350 million was taken out of public budgets and instead used to pay for 129,000 students to attend private schools, according to the Times article.

Stam, who did not go on the March trip to Florida, said the legislation will allow for a $4,000 per student scholarship for low-income children to attend private schools. The scholarships would be paid for by donations corporations make and the businesses, in turn, would enjoy up to $40 million in tax credits to the businesses for the donations.

Stam’s co-sponsor on the legislation, N.C. Rep. Mike Hager, did go on the March trip to Florida.

State Rep. Joe Hackney, the Democratic leader in the House, said he’ll oppose any tax credit voucher program.

“We do not support siphoning off tax revenue to privately educate in North Carolina” while public schools in the state are underfunded, he said.

In March, Parents for Educational Freedom in North Carolina took 11 lawmakers to Florida in March to hear about the program, including N.C. House Speaker Thom Tillis. (Click here[3] to read our investigation into the Florida trip).

The group, which wants to see expanded vouchers for children to attend private schools, maintains that the trip was educational, and therefore allowable under the state’s strict ban on lobbying gifts. Bob Phillips, of Common Cause of North Carolina, said the trip seemed to have more of a lobbying mission, considering that the lawmakers on the trip could be asked to take a position on the tax credit legislation.

The group did not appear to seek an opinion from the State Ethics Commission before the trip, and instead relied on a 2008 ethics advisory letter it had gotten okaying a previous trip to Florida.

Darrell Allison, in an early May interview with N.C. Policy Watch, was asked if there were any immediate plans to push legislation about the tax credit scholarship plan. He responded that the trip was only to introduce the idea, and not to immediately bring the program to North Carolina.

Allison declined to comment and walked away from a reporter when asked Tuesday about the timing of the Florida trip, just two months before his group was hosting thelobby day for the tax credit program.

N.C. Policy Watch also requested public records related to the trip from Tillis’ office on May 3, but has not received any of those records yet. Tillis’ office has indicated it is still processing the public records request.